This Severance Agreement is entered into as of the 10th day of August, 2005 by and between IGI,
Inc. (the "Company), a Delaware corporation, and Frank Gerardi (the "Employee").
W I T N E S S E T H
WHEREAS , the Employee is the Chief Executive Officer and Chairman of the Board of Directors of
the Company; and
WHEREAS , the Company desires to grant to the Employee the right to receive the Severance
Package (as hereinafter defined) upon the occurrence of certain events as set forth in this Agreement.
NOW, THEREFORE , for good and valuable consideration, the sufficiency and receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Severance Package . Upon the occurrence of any of the events set forth in Sections 2, 3, or 4 of
this Agreement, the Company shall provide the Employee with the following benefits (the "Severance
a. $150,000, payable in a lump sum, or in regular payroll payments until paid in full;
b. a lump sum payment for any unused accrued vacation days for that calendar year; and
c. continued coverage under the Company's existing health and benefit plans for a one (1)
year period from the date that written notice of termination is given. This period will be counted as
part of the continuation period under COBRA.
The Company will pay the Employee the amounts specified in Sections 1(a) and (b) above within two
(2) weeks after Employee's last day of employment.
2. Company's Termination of Employment . If the Employee's employment with the Company is
terminated by the Company for any reason other than for Cause (as hereinafter defined), the Employee
shall receive the Severance Package set forth in Section 1 above.
"Cause" shall be limited to (i) willful malfeasance, willful misconduct or gross negligence by the
Employee in connection with his